Kenya has a single regulatory authority that monitors the Forex trading market in the country – the Capital Markets Authority, or CMA. The organization has been on market for quite some time now, however, it licensed the first-ever broker locally in 2017 and since then not many brokers are found with CMA licenses. Instead, the local traders look for international brokerage companies with multiple authorizations from multinational regulatory bodies.
The country has one of the most liberal regulatory frameworks in the region with minimal restrictions and limitations both for brokerage companies and Forex traders. There is no cap on maximum leverage or minimum capital requirements. Most of the regulations serve as the guidance for brokers to satisfy the market standards and offer high-quality brokerage services to Kenyan traders.
When it comes to taxation of the income generated through trading Forex, Kenya has a very specific policy. According to the Capital Markets Authority, the traders are free from taxes only if they trade with a CMA-licensed securities exchange. Otherwise, all Forex earnings are subject to the Capital Gains Tax – 5% of the net income.
Just like the majority of African countries, Kenyan local currency – Kenyan shilling is not in demand as a Forex currency asset. Therefore, one should not expect to find it within the Forex portfolio of the brokers. However, some of the regional currencies, like the South African ZAR are widely available to trade as an exotic Forex asset. Moreover, the majority of leading brokerage companies adopted popular regional payment options, like M-Pesa that allow users to process transactions in domestic currencies.
Some brokerages have also started taking steps to be more accessible on the African market. Especially, after the appearance of the Capital Markets Authority made the local trading scene much more attractive and safe. The role of CMA cannot be diminished in building a reliable trading environment in Kenya. However, local traders still prefer brokerage companies that hold multiple regulations within different jurisdictions. The best option is to look for the brokers with a reputable license, such as ones authorized by the Financial Sector Conduct Authority of South Africa (FSCA). We prepared the list of the multi-regulated and FSCA-approved Kenyan Forex brokers below.
5$
CySEC, FCA, ASIC
30$, 50%+20%
30:1
2009
MT4, MT5, WebTrader
$100
CySEC, CBI, FSA, FFAJ, BVI FSC, FSCA, FSRA
1:400
2006
MT4, MT5, WebTrader, AvaTradeGO
USD 5,000
FINMA, FCA, ASIC, FSA, MAS, AFM
N/A
1:30
1992
SaxoTraderGo, SaxoTraderPro
$5
SVGFSA, FCA, DFSA, FSCA, FSA
From 30% to 100%
1:1000
2010
MT4, MT5
15
CySEC
30%
1:500
2015
MT4, WebTrader
$250
FSCA
1:200
2012
MT4, WebTrader
100$
FCA
N/A
30:1
2008
Custom
$10
Risk Warning: YOUR CAPITAL MIGHT BE AT RISK
N/A
1:1000
2013
Proprietary
10 USD
FCA, CySEC, FSA
N/A
1:Unlimited
2008
MT4, MT5, WebTerminal
$10
N/A
N/A
1:500
2019
MT4, custom
$10
1:500
MT4
250$
FCA, NFA
N/A
200:1
1999
MT4
$25
ASIC, CySEC, FSA, BVI
50%
1:400
2001
WebTrader, MT4, TradingView
100
FCA, CySEC, DIFC, CIMA
N/A
500:1
1977
MT4, MT5
$100 AUD
ASIC
N/A
500:1
2005
WebTrader, MT4, MT5, IRESS
AUD$200
ASIC, SCB, CMA, CySEC, FCA, BaFin and DFSA
N/A
1:400
2010
MT4, MT5, cTrader, TradingView
$50
N/A
N/A
1:500
2015
MT4
1 USD
ASIC, FCA
10 USD
1:500
2005
MT4, MT5, WebTrader
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The only regulatory body that can control and manage the operations of licensed Forex companies in Kenya is the Capital Markets Authority (CMA). Notably, the first-ever brokerage in Kenya that was licensed by CMA was Execution Point Ltd in 2017. Meaning that it was guaranteed the right to act as a link between the foreign exchange market and clients in return for a commission.
You will hardly find the best Kenyan broker that is regulated locally and can operate on the Forex market legally. This basically means CMA left Kenyan traders, to trade with unregulated or offshore brokers. If you would compare the requirements to apply for the license offered by regulatory bodies of other countries, even Uganda or Ghana, you would notice that those are much more complicated and strict when compared to the Kenyan ones. Nevertheless, it is becoming obvious that the Kenyan regulatory framework does not attract foreign investors and brokerages enough. This is evident by the fact, that you won’t find any foreign Forex brokers that have their offices in Kenya.
Alternatively, Forex traders in Kenya choose the brokers that are regulated by the regional market regulators, such as the Financial Sector Conduct Authority in South Africa (FSCA). The institution has a strong reputation in the Forex industry and is respected in almost every corner of the world. Moreover, the regulations of the FSCA are not strict and limiting, compared to its closely-resembling organizations such as the Australian Securities and Investments Commission (ASIC).
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Capital Gains Tax in Kenya is 5% on Forex incomes. In contrast to many African countries, Kenya has a relatively developed taxation system. Forex incomes are taxed as Capital Gains Tax (CGT) in all developed economies. Some of the states have made an exception for Forex traders and included trading Forex as an exemption from the Capital Gains Tax. Kenyan government chose the same approach and freed the traders from paying the tax, however, only on one condition. The traders have to be trading on the platforms of CMA-licensed Forex brokers to be exempt from CGT fees.
As we already discussed, none of the leading brokerage companies hold the Capital Markets Authority license, since the regulator does not provide an attractive trading environment and has rather loose regulations. Moreover, most Kenyan traders still prefer to trade with international regulated brokers, therefore, they are eligible for paying the Capital Gains Tax. On the other hand, the good news is that Kenyan CGT is much less compared to the rest of the countries on the African continent. Forex traders have to pay 5% of their net earnings at the end of the tax year.
The domestic currency in Kenya is called the Kenyan shilling. It is considered to be one of the most stable currencies in African regions. However, not much of the currency is in circulation currently making it a less attractive choice for Forex trading. Unfortunately, at the moment we could not find any top Kenyan brokers offering the Kenyan shilling currency pairs as trading assets.
If you are still looking for exotic Forex currency pairs, most of the leading brokerage companies in Kenya will offer regional currency pairs within their Forex portfolios. For example, the South African Rand is the most popular tradable currency in the African region. Its price is also fluctuating enough to make the currency attractive for foreign investors and speculators, as well. The most common Forex pairs available with the Rand are EUR/ZAR and USD/ZAR. The spreads on these two currency pairs are almost always similar ranging between 200-240 pips depending on the broker.
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As we have already mentioned, the main market regulator of Kenya the Capital Markets Authority does not enforce strict laws and regulations. Instead, the CMA issues recommendations annually that aim to facilitate the growth of Forex trading in the country. At the moment, there are up to 5 brokerage companies registered locally and licensed by CMA, but they do not appear on the globally recognized list of licensed Forex brokers in Kenya, yet. The regulator recommends a cap on leverage for up to 400:1 to its licensed brokers. However, for multinational brokers, this cap is not relevant.
When comparing to the neighboring market regulator in South Africa, we can see that the FSCA-regulated Forex brokers are also able to offer leverages up to 1:400. This leverage level is quite flexible for almost every level of Forex trading experience. We would not recommend using too high leverages as they impose great financial risks on your funds.
There are numerous payment methods offered for traders on the Kenya Forex trading market. Almost every common and popular payment solution is supported on the platforms of the best Forex brokers Kenya. The traders can access Visa/Mastercard payments, bank wire transfers, Skrill and Neteller, and in limited cases PayPal, as well. However, one of the most frequently used payment options in Kenya, as well as in other African countries, is the M-Pesa payment system. M-Pesa is a mobile phone-based money transfer launched in 2007. If you are familiar with that payment system and don’t want to switch to anything else, you may definitely find lots of Kenya forex brokers that accept M-Pesa.
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As the Forex market in Kenya is quite volatile and unstable and things are not crystal clear with brokers’ regulations as well, you need to pay detailed attention to the broker and its operations. The fact that there were already several scam cases taking place in Kenya alone can justify caution and careful analysis of the future brokerages to go with. A few years ago, the African region took a massive hit of Forex frauds with illegitimate companies misleading the traders through the telemarketing channels. As the concern grew among the governments of different African countries, the Kenyan government introduced harsher regulations under the Capital Markets Authority monitoring program. The CMA also issues multiple guidelines on how to avoid scams and file for any fraudulent behavior identified by the traders.
The regulatory authority alone cannot handle all cases of money-related crimes. It is also important that traders take the responsibility for themselves and research all the brokerage companies that they plan to trade with. The Capital Markets Authority, as well as any other regulatory body constantly updates its lists of licensed Forex brokers. Therefore, look for the brokers that are found within the databases of the market regulators to avoid potential scams.
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